Analysts and investors react to AI market rout
SPY•The Nasdaq fell 5.5% on Thursday, its biggest drop since the 2025 tariff-triggered rout, as investors worried a Democratic sweep in the midterm elections could lead to regulation and slow the AI boom. On Friday, Seoul trading was halted after stocks plunged 8%, while Tokyo’s Nikkei fell more than 6%.
1. Markets sell off
Stock markets tumbled as investors assessed whether a Democratic sweep at the midterm elections could lead to regulation and slow the AI boom. The Nasdaq fell 5.5% on Thursday. On Friday, trading in Seoul was halted after stocks plunged 8%, and Tokyo’s Nikkei fell more than 6%.
2. Investors weigh risks
Market participants cited concerns about high valuations, AI spending and the prospect of a scaled-back data centre rollout. Some said panic, leverage and forced liquidations could intensify selling; others cautioned that it was too early to say whether markets had bottomed. One strategist said a market correction was more likely than a bear market if the economic outlook remained unaffected.
